As the mobile landscape rapidly evolves and customer usage of mobile continues to accelerate, successful companies will leverage mobile channels to gain market share, foster deeper customer relationships, and build new sources of revenue.

Strategic Developments

Rapid expansion of mobile internet usage: Opera’s September State of the Mobile Web report pegs year-over-year US mobile page view and unique user growth at 309% and 123% respectively; Pew Internet reports daily mobile web users comprise 19% of all US adults (a 73% increase in 16 months)
Emergence of new mobile markets: rough estimates place the market size of Apple’s App Store at around $150 million annually
Mobile market share up for grabs: while Baidu is the clear leader in China for web searches, Google’s mobile investments have made competition nearly even for mobile searches in China

Opportunities

In school way back in 2000, my class reviewed a Harvard case study which centered on the impact of new internet brokerage firms like E*TRADE on Charles Schwab. The case debated whether Schwab should chase the internet leaders or stick to its core “brick & motor” business, forgoing internet channels entirely.

Some students at the time maintained Schwab shouldn’t invest at all in internet channels—rather they should focus on their “high touch” positioning since their best clients weren’t currently engaged with online channels. Fast-forward ten years and the class debate looks pretty archaic, until you consider a recent review of the top 100 internet brands which contends that only 1 in 3 brands has an effective mobile web presence (incidentally, Schwab and E*TRADE both got it right).

schwab-etrade

While the recent review had considerable subjectivity in the way “effective mobile web presence” was measured, my personal experience validates that many brands are still sitting on the sidelines. Businesses not engaging users in the mobile channel bring us back to the old debate—”should we build a [mobile] website?”.

These businesses should be warned—brand dominance in the mobile space is not a foregone conclusion. Recent search engine market share data from China (as reported by Analysys International) shows Baidu, the leading search engine, has not maintained its dominant position in mobile search. In fact, several providers with virtually non-existent market share for standard web search have captured a significant proportion of the mobile search market (e.g. 3GYY).

search-engine-market-share-china

Emergence of completely new business models and markets is also creating significant business opportunity. A case in point is the iTunes App Store. Rough estimates place the paid app market within the iTunes app store at $150 million annually—not shabby for a market that didn’t exist 2 ½ years ago!

estimated-apple-app-store-market-size

Explosive growth of mobile web usage, business innovation in the mobile sector, and uneven investment by the dominant players in the traditional web has unfrozen market share and created completely new business models, revenue streams, and growth opportunities. All of these factors are reminiscent of internet growth from ten years ago—is your business still partying like it’s 1999?

Sources:

http://www.opera.com/smw/2009/09/

http://pewinternet.org/~/media//Files/Reports/2009/Wireless-Internet-Use.pdf

http://www.pcworld.com/businesscenter/article/171371/ googlebaidu_rivalry_goes_mobile_in_china.html

http://www.marketreportchina.com/market/article/content/3376/200908/206975.html

Strategic Developments Impacting Optimization of Mobile Businesses

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